Embattled NYSE chief quits

NEW YORK  New York Stock Exchange chairman Dick Grasso resigned Wednesday amid rising fury over his $139.5 million pay package, his 36-year career ruined by cries that he made too much money running the worlds richest financial market.

Associated Press

Published 12:00 am, Thursday, September 18, 2003

Grasso called an emergency meeting of the NYSE board shortly after the market closed and offered to resign as chairman and CEO if the board requested, said H. Carl McCall, chairman of the NYSE compensation committee.

"The board did so and accepted that resignation," said McCall, who chaired the meeting.

Grasso, in a statement, said, "I believe this course is in the best interest of both the exchange and myself."

Grasso said he was stepping down "with the deepest reluctance."

"Throughout my career and on behalf of all exchange constituents, I have worked with great partners to build and enhance the value and brand of the NYSE," Grasso said. "I look forward to supporting the board and the exchange in bringing about a smooth transition to a successor."

Resentment over the multimillion dollar pay package was coming to a head on the exchange floor, as well, as active seatholders planned to gather after the market closed today to discuss the issue with three directors who are also NYSE members.

The NYSE revealed its top executives pay for the first time last month as it announced Grassos contract had been extended through 2007. News that he would receive a lump sum payment of $139.5 million in accrued benefits and tax-deferred savings sent jaws dropping across Wall Street. Even some board members were surprised by certain pay arrangements. The funds accumulated over his 36-year career with the exchange, mostly during his eight years as chairman.

Grasso has insisted he did nothing to influence his pay. At a Sept. 9 news conference, when he announced he would forgo another $48 million promised to him under his contract, he said each year when informed of his compensation he responded by saying, "Im blessed. Thank you."

Critics, from investor advocates to politicians and traders, say the lavish pay undermines the credibility of the exchange, a not-for-profit institution that is owned by its members and also serves as a regulatory watchdog.

Michael LaBranche, the head of LaBranche & Co., one of the NYSEs largest stock-trading specialist firms, had come out earlier in the day in favor of a change.

"We are calling for Grassos immediate resignation in the interest of the New York Stock Exchange. We think Dick Grasso has to leave now in order for the exchange to move forward and restore investor confidence in the marketplace," he said.